Articles from Foster Swift Collins & Smith

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Foreclosure Without Closure: Sixth Circuit Analyzes Claims Asserted by Borrower Following State Court Foreclosure Proceedings

Submitted by Anonymous (not verified) on Tue, 11/04/2014 - 19:00

The financial and housing crisis that began in 2008 led to a huge wave of foreclosures and foreclosure-related litigation. While foreclosure is rooted in state law, the initiation of a foreclosure proceeding by a lender often leads to federal bankruptcy proceedings initiated by a borrower, giving rise to interesting legal issues involving the interplay of state foreclosure law and federal bankruptcy law. Recently, the U.S.

Timing is Everything: Sixth Circuit Reverses Bankruptcy Court and Rules that Lawsuit Settlement is Not Property of the Debtor's Estate

Submitted by Anonymous (not verified) on Sun, 09/28/2014 - 19:00

When
someone files for bankruptcy, an estate is created that consists of, among
other things, any and all assets owned by, or to which the debtor filing the
bankruptcy case has a right to or interest in. This includes tangible
things such as real estate, vehicles, money, clothing, and jewelry, as well as
rights to property such as litigation claims.
In a
Chapter 7 case, all assets belong to the trustee on the date a case is filed
unless an exemption is claimed, and the trustee gets to keep, sell or otherwise

Are Student Loans Dischargeable in Bankruptcy? Only if You Can Prove Undue Hardship

Submitted by Anonymous (not verified) on Tue, 08/19/2014 - 19:00

Many
students don't realize the scope and extent of the lifelong financial burden
they saddle themselves with when taking out student loans. It is only after
getting into the "real world" that they realize that living expenses
are higher, and after tax income is lower, than they anticipated, making
student loan debt repayment difficult if not impossible.
Some
look to bankruptcy for relief and a fresh start. But all debt is not treated
equally in bankruptcy. Student loan debt is not the same as, for instance,

Sixth Circuit BAP Rules that "Chapter 20" Debtor May Strip Off Valueless Liens

Submitted by Anonymous (not verified) on Wed, 08/06/2014 - 19:00

Lien
stripping is a process that involves eliminating junior liens (such as a second
mortgage) through the bankruptcy process. In a recent appeal to a Sixth Circuit
Bankruptcy Appellate Panel ("BAP"), the BAP overturned a bankruptcy
court's denial of a Chapter 13 debtor's motion to avoid the lien of an inferior
mortgage lien holder. Read More ›

Supreme Court Applies its Stern Ruling and Issues a Narrow Decision Holding that Bankruptcy Courts Can Hear, But not Decide, “Stern Claims”

Submitted by Anonymous (not verified) on Tue, 07/08/2014 - 19:00

In 2011, the U.S. Supreme Court (the “Court”) issued
its noteworthy decision in Stern v. Marshall,1 in which it held
that bankruptcy courts lack the constitutional authority to enter a final
judgment on a state law counterclaim that is not related to the bankruptcy
proceeding. Since Stern, a number of cases have been published - at both
the bankruptcy court and court of appeals levels - where Stern
jurisdictional issues have been raised and adjudicated. We recently wrote about

Ruling in Prior Litigation Precludes Relitigation of Factual Issues in Bankruptcy Nondischargeable Adversary Proceeding

Submitted by Anonymous (not verified) on Thu, 06/12/2014 - 19:00

When a debtor files for bankruptcy, it is principally to obtain a fresh start and
discharge of debts from creditors. But not all debts are dischargeable. The
Bankruptcy Code lists 19 categories of nondischargeable debts, which Congress
has determined are not dischargeable for public policy reasons.
Some debts are always nondischargeable, including certain taxes, child support, and
court fines and penalties, to name a few. Others are not deemed automatically
excepted from discharge, but can be when challenged by creditors. When a case

Sixth Circuit Rules that Individual Chapter 11 Debtors are Subject to the Absolute Priority Rule

Submitted by Anonymous (not verified) on Tue, 05/20/2014 - 19:00

One of the fundamental tenets of a business bankruptcy reorganization plan under
Chapter 11 of the Bankruptcy Code is the "absolute priority rule."
This rule, codified in section 1129(b)(2)(B)(ii) of the Bankruptcy Code,
provides that every unsecured creditor must be paid in full before the debtor
can retain any property under a reorganization plan. Chapter 11, however, is
not solely the domain of business debtors. Individuals (who more commonly seek
protection under Chapters 7 and 13) may also file for Chapter 11. So how does

The Aftermath of Stern v. Marshall: Sixth Circuit Ruling Addresses Bankruptcy Court’s Jurisdiction

Submitted by Anonymous (not verified) on Wed, 05/14/2014 - 19:00

One of the most interesting, and at times vexing, issues that arises in bankruptcy proceedings involves the jurisdiction of the bankruptcy courts. In 2011, the U.S. Supreme Court weighed in with its noteworthy decision in Stern v. Marshall, in which it held that bankruptcy courts lack the constitutional authority to enter a final judgment on a state law counterclaim that is not related to the bankruptcy proceeding.

Law Won

Submitted by Anonymous (not verified) on Thu, 05/01/2014 - 19:00

In Law v. Siegel, a case decided by the U.S. Supreme Court in March, the Court unanimously ruled that the bankruptcy court exceeded its authority when it surcharged the debtor’s homestead exemption to pay the Chapter 7 Trustee’s attorney fees, despite the debtor’s misconduct.

Chapter 7 Debtor Required to Turnover Proceeds of Life Insurance Policy Used to Pay for Father's Burial

Submitted by Anonymous (not verified) on Thu, 03/27/2014 - 18:00

A recent decision in the U.S. Bankruptcy Court for the Western District of Michigan[1] granted a Motion filed by the Chapter 7 Trustee requesting turnover by the debtor of proceeds of a life insurance policy that were used by the debtor to pay the burial expenses of her father.

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